Lay out options

Published: Sunday, May 26, 2013 at 08:00 AM.

Money is fungible, and what is spent in one area can free up funds to be spent, or saved, elsewhere. Still, the best strategy is to give taxpayers a robust and diverse mixture of options and let them tell commissioners what they prefer. It would be educational, and it would foster transparency and accountability in local government.

Bay County commissioners last week received good news about property tax revenues and the Fiscal Year 2014 budget.

But it wasn’t good enough to close a projected budget deficit. That could mean bad news for local taxpayers — but not before they receive a menu of options on how to keep the county in the black.

At the Commission meeting Tuesday, county budget officer Ashley Stukey told commissioners that preliminary budget projections show that taxable property values will increase for the first time since 2008. That’s an encouraging sign that the real estate market is finally, albeit slowly, recovering.

Unfortunately, the increase isn’t sufficient to cover a predicted $4 million budget shortfall. That’s smaller than the $6 million deficit the county has faced in recent years, but it’s still going to require some shoveling to fill.

In the past the county has cut spending (including eliminating 100 positions) and dipped into its reserve funds to stay out of the red. But those reserves are now nearly tapped out. Stukey on Tuesday suggested one way to cover the gap: Increase the millage rate by .4 or .5 mills.

He might as well have pulled the pin on a stink bomb in the Commission chamber.

Every commissioner wrinkled his nose, none more so than Chairman George Gainer, who never met a tax hike he didn’t hate. It’s safe to say that any Commission vote to raise taxes would be no better than 4-1.

Yet, although nobody embraced the idea of a millage increase, other commissioners appeared to leave the door open a crack to the proposal, predicated on the idea that further spending cuts might reduce county services to the point that residents would prefer a small tax increase.

Back when the county’s taxable value of property was much lower (between $8 million and $12 million from 2003-05), the millage was much higher — 5.662 mills. As property values soared to more than $18 million, though, commissioners trimmed the millage to its current 3.65 mills, where it has stayed even as values declined. That was appropriate.

Property values bottomed out to $13.8 million last year, but Stukey said Tuesday that so far this year they are up slightly, to $13.9 million. That means a relatively modest millage increase would be needed to balance the budget without touching reserves or cutting spending.

County staff should publicly lay out a wide range of options of millage increases, spending cuts and reserve funds, from all-or-nothing to different mixtures of two or three.

And let’s see different kinds of cuts. Don’t tell residents that only law enforcement and firefighting can be cut, compromising public safety. There are alternatives. That’s not to say they won’t be painful, but give the public a chance to choose its poison. What roads won’t be resurfaced? What canals won’t get dredged? What operating hours would be reduced? How many employees would be laid off? Could salaries be cut? What programs would be pared back, postponed or eliminated?

Then there’s the new tool at the county’s disposal — $8 million it received from BP in April as part of a settlement regarding the 2010 Deepwater Horizon oil spill. Commissioners said then that they planned to be conservative with the money, preferring to use it to replenish depleted reserves rather than spending it on as-yet-unimagined projects.

Gainer reiterated Tuesday that he believes short-term fixes, such as tapping reserves, will buy sufficient time because “we’re going to outrun this economic thing.” In the next year or two, he believes, rising property values will produce enough ad valorem revenues to end the budget shortfalls.

Money is fungible, and what is spent in one area can free up funds to be spent, or saved, elsewhere. Still, the best strategy is to give taxpayers a robust and diverse mixture of options and let them tell commissioners what they prefer. It would be educational, and it would foster transparency and accountability in local government.